Anguilla investment

Investment overview

Anguillan law firm Webster Dyrud Mitchell describes the investment climate in Anguilla

As a vibrant financial services jurisdiction, both the public and private sectors contribute to the growth of Anguilla’s economy by actively courting and promoting new avenues for investment. While the brief of The Financial Services Commission is regulatory, it collaborates with the government and the private sector to promote Anguilla overseas. 

Anguilla’s zero-tax environment is an especially attractive component of its appeal and, coupled with its reputation as a well-regulated jurisdiction, marks it out as a quality offshore jurisdiction. As evidence of commitment to an investment culture, the government in 2000 established a task force to examine the framework for the development of an e-commerce policy, designed to meet the challenges of globalisation and liberalisation and to enable businesses operating out of Anguilla to compete globally and to complement the tourism and financial services sector.

That initiative has been followed by the development of modern mutual funds and insurance legislation, both designed to enable Anguilla to compete strongly with jurisdictions already established in those fields. Anguilla’s economy is primarily based on tourism, followed by the financial services sector. The modest agricultural production is almost entirely used for domestic consumption. It can therefore be said that the primary natural resources of Anguilla's 35 square miles are its climate, beaches, marine life and diving sites. Their exceptional qualities draw Anguilla's tourists, who form the backbone of its buoyant economy.

Up market tourism 

Fishing and boat building (a longstanding tradition of excellence in Anguilla) also contribute, as does an increasingly active financial services sector. There is an avowed policy of favouring up-market tourism, while discouraging the mass-market tourism industry. The convenient location of Anguilla, its vibrant culture, friendly people and virtually crime-free society have together enabled Anguilla to realise this aim, with a number of world class hotels and restaurants that is disproportionate to the island's size and population. 

Anguilla has a very low inflation rate of 2.3%. The services sector which includes tourism and financial services contribute 78% of GDP, manufacturing industry 18% and agriculture 4%. Anguilla began to develop a financial services industry following the 1993 Mokoro Report, which concluded that Anguilla’s offshore financial services were a natural concomitant to the tourism industry, the British and Anguillian governments embarked on a progressive programme to launch Anguilla as an upmarket, well-regulated and exclusive financial services centre.

The result of this was an extensive legislative reform programme, culminating in the 1994 enactment of legislation designed to encourage the development of a well regulated offshore financial services industry. The significant growth in government revenues earned from the financial services sector over the last few years is a testament to the success of the policies to date. There are ambitious plans for the future and, within the past few years, Anguilla has made significant strides in its efforts to position itself as a major player in the international financial services arena.

Because the United Kingdom retains responsibility for Anguilla’s foreign affairs, there are no embassies established in Anguilla nor does Anguilla maintain any overseas. Anguilla does, however, have membership (Associate Membership in most cases) in regional associations such as the Caribbean Community (CARICOM), the Organisation of Eastern Caribbean States (OECS), the Eastern Caribbean Central Bank (ECCB), the Caribbean Development Bank (CDB) and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). In addition to these organisations, by virtue of the Diplomatic Privileges (Extension) Act Anguilla has extended diplomatic privileges and immunities to several international organisations. These organisations are declared to be accorded diplomatic privileges by Order of the Governor in Council and these privileges extend to representatives, officers and members of staff of the organisations concerned. 

Export incentives

In Anguilla, direct taxation is non-existent and even indirect taxation is very limited, which is why the territory is commonly referred to as a zero-tax jurisdiction. In terms of taxation on exports, the Export Duty Act imposes a duty on a very limited range of goods: livestock, lobsters and raw materials such as salt, sand and stone. The list is subject to amendment by the House of Assembly. There are no other applicable export taxes. The Export Duty Act does not apply to goods transhipped through Anguilla. Apart from this exception, there is therefore no scope for tax incentives for exports. 

The Eastern Caribbean Central Bank (of which Anguilla is a member) operates an Export Credit Guarantee Scheme which provides pre-shipment insurance to assist exporters in procuring finance more easily from commercial banks and to promote exports from the ECCB region. The Bank has also proposed the establishment of the Eastern Caribbean Enterprise Fund which is geared towards the development of the productive sector of the territories and will provide financing, export insurance coverage, and business advisory and consulting services. 

Investment incentives  

Concessions are granted to inward investors by the Hotels Aid Act, which exempts all custom duties and pier dues (usually between 10%-30%) on all building materials and other articles of hotel equipment imported by properties with more than 10 rooms. These concessions are available for the construction of new hotels as well as the expansion of those already constructed. The Minister of Finance has authority to approve applications for this concession. There are no hard and fast rules requiring local participation in inward investments. The majority of inward investments, however, are approved without any requirement of local participation.

Contact:

Webster Dyrud Mitchell

PO Box 58
Victoria House
The Valley
AI-2640 Anguilla
British West Indies